The pitfalls of employee immigration status

19 December 2017

What can employers do if they discover a staff member’s status is not what it appeared? Richard Fox and Marcia Longdon report in light of a recent Employment Appeal Tribunal ruling

Employers are rightly keen to make sure there are no mistakes so far as their employees’ immigration status is concerned. Usually, these issues are sorted out at the point of recruitment – but not always.

So what should businesses do if they subsequently discover that their employees’ immigration status is not what they had assumed? And if they do decide to dismiss, to what extent may they become exposed to the possibility of an unfair dismissal claim?

This is not quite as simple a scenario as was once assumed. In the recent case of Baker v Abellio London Limited, the employee, Mr Baker, had been working for three years when his employer (Abellio, a bus company) asked him for documents to evidence his right to work in the UK. By that time, Baker's Jamaican passport had expired, so the company lent him £350 to obtain a new one.

When he did so, Abellio, after discussion with the Home Office, told him he would need to make what is known as a ‘no time limit’ application. He refused to do this, because he said he could not afford to and there was in fact no need, because he was allowed to work here by virtue of the Immigration Act 1971.

As a result, his employment was terminated with immediate effect. Baker brought an unfair dismissal claim, but this was rejected by the employment tribunal. It held that the company could not continue to employ him without proof that he had the right to work here. To do otherwise would have exposed them to the possibility of a fine, or even prosecution.

But when the case went on appeal to the Employment Appeal Tribunal (EAT), its decision was more nuanced. This was because, under the relevant legislation, and on a more detailed analysis, Baker was not, in fact, subject to immigration control. He did not formally require leave to enter or remain in the UK. This meant the company did not contravene section 15 of the Immigration, Asylum and Nationality Act 2006. In any case, even if he was subject to immigration control, the court held that the company was not actually bound to obtain the prescribed documents: these would only give them the possibility of an excuse from penalty.

As a result, Abellio was not able to defend an unfair dismissal claim on what is considered to be the most usual ‘ground’ for these purposes, namely illegality (ie it would be unlawful for Abellio to continue to employ Baker).

That did not, however, hand victory to the employee. This was because the company was potentially able to use the alternative ground by showing ‘some other substantial reason’ of a kind such as to justify the dismissal (under section 98(1)(b) of the Employment Rights Act 1996). As there had been little focus on the actual enquiries the company made at the Home Office, the EAT therefore sent the case back to the employment tribunal to look again at this aspect more closely.

The lesson for employers is that if they wish to terminate the contract of employment of an employee without satisfactory evidence of their right to work in the UK, they should be giving themselves the opportunity to defend any potential unfair dismissal claim on the basis of either illegality (the more traditional route) or the alternative ground known as ‘some other substantial reason’. And if using the latter, they must nonetheless go through a form of process to make sure the dismissal is fair. Just relying on the ground itself to justify the dismissal is not going to be enough to get them off the hook.

None of this means employers can or should relax their vigilance. Fines for employing workers illegally are now at a record high (up to £20,000 per employee) and employers face criminal sanctions if employees' right to work documentation is not kept up to date, with implications for sponsor licenses too. But how they deal with employees whose status is in question needs more careful handling than once thought.